Forced Revival of Iraqi Fuel Deal

The article discusses the issue of the reactivation of the Iraqi fuel oil contract with Lebanon after it was previously halted. This situation reflects a state of confusion and mismanagement in the electrical sector. The goal is to meet Lebanon's need to operate power plants and generate approximately five hours of electricity daily. Sources indicate that Iraq agreed to renew the contract without clarity regarding the quantities, the type of fuel oil, or payment schedules. Meanwhile, Lebanon is suffering from a financial crisis due to the unavailability of foreign currencies necessary at Banque du Liban to sustainably purchase fuel oil, which has led to a debt accumulation estimated at around two billion dollars. The article explains that this contract, signed in 2021, is seen as a temporary, ad hoc solution, relying on a non-cash barter mechanism that has resulted in large debt accumulation on Lebanon. The key issue highlighted is the lack of foreign currency needed to finance fuel imports, despite attempts to ensure temporary operational continuity. Ultimately, the situation underscores Lebanon’s significant challenges in managing its electricity sector, with continued reliance on temporary contracts and financial problems that require structural solutions to ensure sustainable electricity supply and services.

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